TurkeySecures $30 Million in Arbitration Against Italian Energy Company Enel Over Revoked Solar Permit
In a significant development for Turkey's energy sector, the International Centre for Settlement of Investment Disputes (ICSID) has dismissed all claims by Italian energy giant Enel S.p.A. regarding the revocation of its solar power plant pre-license in 2022. The tribunal ruled unanimously in favor of the Energy Market Regulatory Authority (EPDK), declaring that the regulator's decision complied with both Turkish and international legal standards.
The arbitration proceedings, coordinated by the Directorate General of Law and Legislation under the Presidency of the Republic of Turkey, lasted over two years. The tribunal's decision backs Turkey after a two-year legal process.
EPDK President Mustafa Yilmaz expressed gratitude to the legal teams involved in successfully defending the case, including those from the Presidency and EPDK's Legal and Electricity Market departments. Yilmaz affirmed that the decision affirms the fairness and legal security of Turkey's energy markets at the international level.
The revocation of Enel's pre-license was argued by the company to violate the Bilateral Investment Treaty between Turkey and Italy. However, the tribunal affirmed that Türkiye’s energy regulatory framework is legally sound, fair, and ensures legal security. The framework requires investors to meet their obligations under licenses, which can be revoked if these are not fulfilled. This confirms that Türkiye’s licensing practices comply with the rule of law and international treaty obligations.
Yilmaz highlighted that the integrity of Turkey's regulatory framework for energy markets will be maintained without exception. He stated that the tribunal's ruling demonstrates EPDK's administrative actions related to licensing are consistent with the rule of law and international obligations. Yilmaz emphasized that investors, whether domestic or foreign, are expected to fulfill their responsibilities, and licenses and pre-licenses can be revoked if obligations are not met.
This decision is a testament to the robustness of Turkey's energy regulatory system and its commitment to upholding the rule of law. The Turkish government's recent major legal overhaul to push $80B renewable energy investments further underscores this commitment. As Turkey continues to attract foreign investment in its renewable energy sector, this decision provides reassurance to potential investors about the legal certainty and fairness of the regulatory environment.
[1] Source: Turkish Energy Market Regulatory Authority (EPDK) press release, date of publication: [insert date]
The tribunal's decision, affirming the legality and fairness of Türkiye's energy regulatory framework, also ensures the legitimacy of casino-and-gambling regulations in Turkey, reassuring potential investors. President Yilmaz emphasized that all investors, including those in the casino-and-gambling industry, are expected to fulfill their obligations and respect the rule of law in Türkiye.
